By Hansen Tao
In May 2025, the Beijing High People’s Court handed down an important decision reaffirming that trademarks acquired through bad faith registration cannot be “cleansed” simply by being transferred to another company, even if the new owner puts the mark into actual use.
This case illustrates how Chinese courts are tightening scrutiny on both bad-faith trademark filings and non-bona fide trademark transfers, and why companies need to carefully assess the provenance of marks they acquire.
The dispute involved Joyrich, a Shanghai company, which sought to invalidate a trademark that looked strikingly similar to its own. The mark had first been filed by a domestic company known for registering names that closely echoed famous brands like “Goldlion” and “GOLDLY.” Later, this mark was transferred to another company, FULL ON INDUSTRY, which tried to defend its validity by arguing that they had put the trademark into active commercial use after acquiring it.
The Court’s Reasoning
1. Pattern of Bad-Faith Filing
Looking at the broader pattern, the judges noted that the original registrant’s behavior fit a classic case of bad-faith filing: multiple applications resembling well-known marks, with no evidence of real business need. That kind of conduct, the court said, disrupts the trademark registration system and unfairly occupied public resources.
2. Improper Registration Cannot Be Sanitized by Transfer
the court stressed that “improper means” of registration cannot be cleansed through transfer. Allowing a new owner to legitimize a tainted registration would hollow out the very purpose of the Trademark Law (Article 41 of the 2001 version), which is designed to stop deception and protect honest competition. In other words, the stain of bad faith sticks. A change of ownership does not erase the original impropriety.
3. Use After Acquisition Does Not Cure Invalidity
What about actual use? FULL ON INDUSTRY argued that since they were genuinely using the mark after the transfer, it should be allowed to stand. The court disagreed. Use, however genuine, cannot whitewash the fact that the registration was illegitimate from the start.
Why does this matter?
For businesses in China, the message is straightforward: trademarks are not like any other commodity. You can’t just buy them and assume the piece of paper guarantees safety. Due diligence is essential, because if the mark’s origins are questionable, a transfer won’t shield you from invalidation.
For international brands, this is a positive development. It means bad-faith filers cannot easily “launder” problematic marks by passing them on to third parties, a tactic often used to complicate enforcement. And for the market overall, the ruling reinforces trust: trademarks are meant to distinguish goods and services, not to serve as speculative tools or bargaining chips.
Interestingly, China’s approach here is very much in line with what we see internationally. In the EU, marks filed in bad faith can be struck down regardless of assignment or later use. In the U.S., fraudulent registrations can be cancelled under the Lanham Act, and transfer does nothing to change that. China is signaling that it, too, will not allow bad-faith practices to distort its trademark system.
Key Takeaways for Companies
Check before you buy: Trademark transfers may not protect you if the original registration was illegitimate.
Scrutinize filing behavior: A history of filing marks similar to well-known brands is a red flag.
Don’t rely on use as a cure: Active commercial use cannot legitimize a trademark obtained in bad faith.
Stay proactive: Monitor new filings that may target your brand and be prepared to challenge them early.
Conclusion
This decision reaffirms a fundamental principle: trademark law exists to protect fair competition and consumer trust, not to reward opportunistic filings. For brand owners, it’s a welcome strengthening of the tools to fight bad faith. For businesses looking to acquire marks, it’s a reminder that due diligence is not a box to tick — it’s your first line of defense.
At Allasya Law & IP, we work with clients to navigate these complexities, making sure that trademarks are not only registered, but also secure and enforceable in the long run.